Bayer’s Pipeline Delivers a One-Two Punch as Legal Costs Cloud the Horizon

Bayer faces a pivotal Q1 report as promising pharma pipeline wins clash with massive litigation payouts. Asundexian and Kerendia show strong data, but cash flow remains negative.

The narrative around Bayer is becoming a tale of two very different trajectories. On one side, the company’s research labs are churning out clinical wins that could reshape its pharmaceutical future. On the other, a mountain of legal liabilities continues to drain cash and test investor patience. The tension between these forces will be on full display when Bayer reports first-quarter results on May 12.

A Stroke Drug Breaks New Ground

In a landmark development published in the New England Journal of Medicine, Bayer unveiled full Phase III data for Asundexian in April. The drug cut the incidence of ischemic strokes by 26% compared to a placebo, a statistically significant result that sets it apart from earlier contenders in the field.

The real headline, however, is the safety profile. In a trial involving more than 12,000 participants, Asundexian showed no elevated bleeding risk—a critical advantage that has historically plagued anticoagulants. This makes it the first Factor XIa inhibitor to successfully complete a Phase III study. The FDA has already granted the drug Fast Track designation, signaling a clear path toward regulatory review.

Kerendia Builds Momentum

Bayer’s renal franchise is also firing on all cylinders. The FIND-CKD study, a Phase III trial involving more than 1,500 patients, demonstrated that Kerendia (finerenone) statistically significantly slowed the decline of kidney function in adults with chronic kidney disease (CKD) without diabetes, compared to placebo. This is the largest Phase III trial ever conducted in this specific patient population.

The implications are substantial. CKD without diabetes represents a far larger addressable market than Kerendia’s current approved indication for diabetic kidney disease. Bayer plans to submit the data to the FDA to expand the label. Meanwhile, regulatory applications for a heart failure indication are already under review in the European Union and China.

Kerendia generated €829 million in sales last year, and management has set a long-term revenue target of €3 billion. Nubeqa, the prostate cancer drug, is also on a tear, with sales surging 57% to €2.4 billion in 2025.

The Xarelto Hangover and the Path to Growth

The structural challenge remains the patent cliff. Xarelto lost roughly a third of its revenue in 2025, falling to €2.34 billion, while Eylea is under pressure from biosimilar competition. Pharma chief Stefan Oelrich has set a target of returning the division to mid-single-digit growth by 2027, powered by Nubeqa, Kerendia, Beyonttra, and Lynkuet.

Bayer’s 2026 guidance calls for adjusted EBITDA between €9.6 billion and €10.1 billion, with currency-adjusted net sales of €45 billion to €47 billion. Management recently reaffirmed that outlook. But the fine print is sobering: the company expects negative free cash flow this year, with legal payouts of around €5 billion. In fiscal 2025, special charges for litigation totaled €6.2 billion, pushing the group to a net loss of €3.6 billion.

The annual general meeting approved only the statutory minimum dividend of €0.11 per share for the past fiscal year—a stark reminder of the financial strain.

Market Sentiment Sours

Investors are growing restless. Bayer’s stock has fallen roughly 26% from its February high of €49.17, now trading around €36.50. Over the past seven days alone, the shares have shed about 9% to 10%, reflecting how quickly positive pipeline news can be overshadowed by legal overhang.

Net financial debt is expected to climb to around €33 billion this year. Yet the longer-term picture offers some solace: over the past twelve months, the stock has still gained roughly 55%.

The Q1 Test

All eyes are now on the first-quarter report due May 12. That release will provide the first full-quarter snapshot of how Kerendia, Nubeqa, and other growth drivers are performing in 2026. It will also test whether the reaffirmed annual guidance rests on solid operational footing—or whether the legal drag is starting to crack the foundation.

For Bayer, the next few months are a high-wire act. The pipeline is delivering. The balance sheet is bleeding. And on May 12, investors will get their clearest look yet at which force is winning.